Block, the financial technology company formerly known as Square, saw its stock price tumble 17% in extended trading after reporting disappointing first-quarter results and lowering its outlook for the year.
The company posted revenue of $5.77 billion, falling short of Wall Street's expected $6.2 billion and marking a 3% decline from the previous year. While Block achieved record profitability with gross profit rising 9% to $2.29 billion, this still missed analysts' projections of $2.32 billion.
The payment processor also reduced its profit guidance for both Q2 and full-year 2024, citing uncertain economic conditions. Block now expects second-quarter gross profit of $2.45 billion and full-year profit of $9.96 billion, below analyst estimates of $2.54 billion and $10.2 billion respectively.
Key metrics showed signs of pressure, with gross payment volume reaching $56.8 billion versus expectations of $58 billion. The company's popular Cash App service faced headwinds from lower customer inflows and subdued tax season spending, though management anticipates improvement later this year following regulatory approval to expand its lending program.
CFO Amrita Ahuja highlighted the company's record profitability quarter while acknowledging macro challenges. "We recognize we are operating in a more dynamic macro environment, so we have reflected a more cautious stance on the macro outlook into our guidance," the company stated in its quarterly report.
Block continues expanding its services amid growing competition. Recent developments include integrating Afterpay's buy-now-pay-later feature into Cash App Card and advancing its banking capabilities. The company also maintains $2.3 billion in bitcoin holdings and plans to launch bitcoin mining chips later this year.
The stock's latest decline adds to existing pressure, with shares already down 31% year-to-date before this earnings release.